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Vendors Embrace AI Channel Sales, Research Finds

TL;DR

  • AI adoption is accelerating in the channel, with vendors and partners actively exploring AI offerings and integrations.
  • 77% of solution providers do not offer commercial products with GenAI, indicating significant growth potential.
  • AI is expected to drive a massive PC and hardware refresh cycle by late 2024, creating new opportunities for channel partners.

A recent study conducted by The Channel Company (TCC) unveils a growing trend among vendors, highlighting their eagerness to capitalize on the burgeoning artificial intelligence (AI) market through channel sales. The research, presented at TCC’s XChange March 2024 conference by Kristy Davis, global vice president of AI, innovation, and insights at TCC, sheds light on the pivotal role of channel partnerships in the success of AI technology.

Vendors leading the charge

The data reveals that 33% of vendors already have an AI offering that partners can monetize, while 17% are collaborating with AI technology leaders to create such offerings. Furthermore, a staggering 28% of vendors are currently developing AI products specifically designed for channel distribution. This overwhelming vendor commitment underscores the pivotal role the channel is expected to play in the AI era.

Since the emergence of ChatGPT, a groundbreaking AI language model, the AI vendor landscape has witnessed a surge, with over 300 new players entering the market. Moreover, 74% of software-as-a-service (SaaS) platforms have integrated GenAI capabilities, indicating that AI adoption is not limited to large enterprises. Davis noted significant activity in the midmarket segment, ranging from 100 to 1,000 users.

Internal AI adoption and commercial offerings

While the channel’s potential in the AI space is evident, the adoption of AI for internal use and external revenue generation is still in its infancy among solution providers. The share of solution providers who have integrated AI into their workflows increased from 11% in October 2023 to 12% in February 2024, highlighting the early stages of adoption.

Interestingly, 23% of surveyed solution providers have yet to go to market with GenAI products, and a staggering 77% do not offer a commercial product with GenAI capabilities. This statistic underscores the vast untapped potential for channel partners to capitalize on the AI wave. However, some solution providers remain cautious, with the share of those who stated they will never integrate AI into their workflows rising from 4% to 8% between October 2023 and February 2024.

Jason Romer, Chief Operating Officer of Titanium, a Fair Lawn, New Jersey-based solution provider, shared insights into his company’s AI journey. Titanium has leveraged AI internally for automation, aiming to reduce human error and increase operational efficiency. Romer highlighted the importance of automation, stating, “Now it’s a heavy focus on the automation side of it because we obviously want to realize all of the benefits that come from that.”

Romer’s team has used products like Pia to build more automation, targeting level-one engineering tasks such as user onboarding and password resets. Their goal is to automate away dozens of hours of work per week, ultimately achieving a target of 550 nodes per engineer, up from the current 300 nodes.

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The future is AI-powered

The future of the technology industry is inextricably linked to AI, and the channel is poised to play a crucial role in this transformation. Matt Yorke, the recently hired CEO of The Channel Company, emphasized the importance of strategic AI adoption, stating, “You need to have very small tests with defined KPIs, see how those go and then you kind of move out.”

Yorke also highlighted the massive opportunities AI presents, with an expected $151 billion in GenAI spending by 2027 and a “massive” PC and hardware refresh cycle anticipated in the second half of 2024. AI-powered PCs and devices are projected to dominate the market with a 60% share by 2027.

Lenovo’s Partner Director of North America Programs, Operations, and Strategy, Cassie Jeppson, echoed Yorke’s enthusiasm for the AI-driven PC refresh cycle, stating, “There is a different opportunity. AI is that opportunity.”

As the AI revolution continues to gain momentum, the channel is emerging as a critical player in driving its adoption and success. Vendors are actively developing AI offerings for partners to monetize, while solution providers are exploring ways to leverage AI for internal efficiency and external revenue generation. While adoption is still in its early stages, the vast untapped potential and the anticipated hardware refresh cycle position the channel as a driving force in the AI era.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Glory Kaburu

Glory is an extremely knowledgeable journalist proficient with AI tools and research. She is passionate about AI and has authored several articles on the subject. She keeps herself abreast of the latest developments in Artificial Intelligence, Machine Learning, and Deep Learning and writes about them regularly.

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